Payment gateways and bank integrations: open banking explained
Charging online or connecting your product to the banks looks simple until you actually dive in. Between payment gateways, banking APIs, and open banking there is a whole ecosystem worth understanding so you can choose well and avoid reinventing the wheel (or skipping the rules). Here we explain it clearly.
What a payment gateway is
A payment gateway is the service that lets you accept cards or other methods securely: it processes the transaction between the customer, their bank, and yours. Solutions like Stripe handle the most sensitive part (card data, PCI DSS, fraud prevention), so you integrate just a few components and the critical data never touches your servers.
Integrating payments into your product
Integrating payments goes well beyond "adding a button": you have to handle retries, refunds, recurring payments, confirmation webhooks, reconciliation, and edge cases (declined payments, disputes, partial captures). Getting it right is the difference between reliable revenue collection and a leaky revenue stream that quietly erodes margins. That is why it pays to lean on robust, well-documented gateways and build a carefully crafted integration on top of them, with proper testing and clear error handling.
What open banking (and PSD2) is
Open banking, driven in Europe by the PSD2 directive, requires banks to open up their data and services through secure APIs, with the customer's consent. This lets a third party (with the proper authorization) check accounts, initiate payments, or aggregate financial information from several banks. It has been the trigger for much of the recent fintech innovation.
Banking APIs and aggregation
With open banking APIs you can build services that once required being a bank: aggregating all of a user's accounts into a single view, initiating direct transfers (without a card), or using real banking data for credit scoring. The key is working with the right aggregators or licenses, because access to that data is strictly regulated.
Common use cases
- Payments and subscriptions in e-commerce and SaaS.
- Account-to-account (A2A) payments with no card fees.
- Financial aggregation and personal finance.
- Income verification and scoring for lending.
Security and compliance
Everything related to payments and banking data is subject to PCI DSS, PSD2, and GDPR, plus strong customer authentication (SCA). The winning strategy is to delegate anything certifiable to specialized providers and focus your own effort on the experience and the business logic, keeping your regulatory scope as small and well-defined as possible. The less sensitive data your own systems touch, the lighter your compliance burden becomes.
Payment gateway or open banking: when to use each
They do not compete; they complement each other. Card gateways are universal and familiar to users: ideal for e-commerce payments and subscriptions. Open banking (account-to-account payment) eliminates card fees and fits high-value amounts, top-ups, or transfers, although user adoption is still growing. Many products offer both and let the user choose: card for convenience, account-to-account for the savings on fees.
The practical rule: start with a robust card gateway, which covers nearly every case, and add open banking when volume justifies the savings on fees or when you need real banking data for your product (aggregation, scoring).
At AxiomTech we integrate payment gateways and open banking APIs into your product, with the security and compliance the financial sector demands, through custom API integrations.